Miami Lakes, Fla.-based BankUnited Inc. (NYSE: BKU) will acquire the assets of Herald National Bank (AMEX: HNB), based in New York, in a deal valued at $71.4 million.
Through the deal, which was announced today, shareholders of Herald National Bank will have the choice of either receiving cash or BankUnited common stock with a value of $1.35 plus the value of 0.0990 shares of BankUnited’s common stock, according to a press release announcing the deal. The merger is expected to close some time during the fourth quarter of this year.
The transaction is said to valued at $4.13 per share, which is based on the closing price of BankUnited’s common stock as of the close of business on June 1. The final deal will include $22.9 million in cash, 1.7 million shares of BankUnited common stock and is worth 1.4 times Herald National Bank’s state book value as of the end of the first quarter.
“The acquisition of Herald is an important step toward expanding the reach of BankUnited into the New York market” said the BankUnited Chief Operating OfficerRajinder P. Singh in a statement announcing the deal. “Herald’s focus on relationship banking is perfectly aligned with our core vision. With its clean balance sheet and team of talented professionals, we expect this transaction to make a significant contribution to BankUnited’s earnings over time.”
Share of BankUnited’s stock traded down at $27.78 (-0.48 points) while Herald National Bank’s shares traded down at $3.95 per share (-0.18 points) as of late afternoon on June 3.
BankUnited Continues to Step Up Expansion Efforts:
BankUnited, a bank whose main source of business comes from its operations in the southeastern United States, announced its intent to go public in order to raise enough cash to buy New York banks this past October. It accomplished this feat earlier this year in January, when the bank raised $783 in an initial public offering in its first day of trading after selling 29 million shares. At that time, shares of the bank’s stock were priced at $27, which allowed the bank to raise 38% more than expected.
BankUnited’s IPO and, more recently, its acquisition of Herald National Bank speaks volumes about the bank’s strength since emerging from Chapter 11 bank in mid-2009. The bank, which owns depository institution BankUnited and insurance agency BankUnited Investment Service Inc., had assets and $11.2 billion and more than 1,100 employees in 78 branches throughout Florida at the end of the third quarter of 2010.
Herald National Bank had three offices in Manhattan, and serves small and mid-sized businesses and their owners, executives and senior managers. The bank also caters to high-net-worth individuals.